Ernst & Young’s report on the future of universities made a big splash this week, fuelled by apocalyptic headlines heralding the end of the university world as we know it.

No one who has any feel for or interest in the world of higher education would deny that we are living in challenging times. Nor would they deny where the changes are coming from – funding pressures, demographic shifts, changing student bodies, economic globalisation and technological advances are all having very real effects on universities around the world.

We’ve been researching, writing and reading and their effects on the university business model about them for at least a decade. They are the “global warming” phenomena of higher education – we may not necessarily like them, but we can’t avoid them.

But does that mean that collectively universities are about to go belly up? I don’t think so.

The report is quite shocking in its lack of depth. Talking to a couple of Vice-Chancellors or “institutional leaders” in my books does not equate to serious research. Having selective quotes in tabloid style throughout the report at a minimum is misleading. And I assume everyone sees through the simplistic marketing ploy of Ernst & Young’s own “university model for the future”.

The report also lacks references to similar work undertaken on the topic. Earlier this year Tom Kennie from the British Leadership Foundation, together with his colleague Ilfryn Price, wrote a paper on a new ecology for British higher education, exploring possible types of institutions in a future characterised by competition, disruptive change and market dynamics. Mike Gallagher recently undertook a similar exercise for Australia. And Harvard’s Clayton Christensen did the same for the US system last year.

The references in the Ernst & Young report are in small print, but unfortunately none of this vital research is there. Earlier work by Kennie also concluded that the transformations in the professional services industry are unlikely to hit higher education industry in the same way. There are certain defining characteristics that at the very least will help buffer universities from this disruptive change. And current barriers to entry in the Australian university system (keeping Commonwealth Supported Places funding confined to public universities) serve to underline the case in point for Australian universities (although not for our TAFEs as recent history has shown).

The report is also selective in its use of data. Staff data in universities is notoriously contentious. But making academic-professional staff ratio comparisons without reference to casualisation makes no sense.

It’s one of the crucial variables in the current debate on the academic profession, next to the need to redefine this profession. As is the case for the emergence of new categories of professional staff bridging both categories, the so-called “third-space”
professionals. Leaving these aspects out of an analysis of higher education dynamics is very unhelpful.

All this is not to deny nor ignore that universities should reconsider their business models and make serious work of improving productivity. It is high time we all do. But again, this message has been going around for a while – although many universities have put it in the “too hard basket”.

Instead of debating fee hikes or unregulated market coordination, universities should be discussing the bigger challenges ahead. Our sector is way too crucial to the future of Australia in terms of innovation and socio-economic development and growth to not work on making universities more viable.

Despite its superficial treatment of what it is that is driving the changes in our sector, the Ernst & Young report is welcome if it can help shake up the sector.